Last week’s strong USD/JPY rebound confirms a short-term bottom at 140.25, with the 4-hour MACD bullish convergence. However, price action from there is likely to correct the decline from 151.89. While further upside cannot be ruled out, the upside should be limited to the 61.8% retracement levels from 151.89 to 140.25 at 147.44. On the downside, minor support at 143.17 will shift the bias back to the downside to retest the 140.25 low.
In the bigger picture, for now, the drop from 151.89 is still considered the third leg of the corrective pattern from 151.89. Another drop through 140.25 would target the 61.8% retracement from 127.20 to 151.89 at 136.63. A sustained breakout there will pave the way to 127.20 support (2022 low). However, a strong break of 147.44 Fibonacci resistance will weaken this view and retest 151.89 instead.
In the long-term picture, as long as resistance at 125.85 turns into support points (2015 high), the uptrend from 75.56 (2011 low) is still in favor of continuing through 151.93 (2022 high) at a later stage.
